Blockchain Technology & Cryptocurrency – In a Nutshell

Blockchain technology, also known as the decentralised, distributed ledger technology, has gained popularity in India in the last 2 years. According to studies, in the next 5 years, Blockchain has the potential to add value to the tune of USD 5 billion across all sectors in India.

Various banks in India have been increasingly adopting this technology. Utilising this distributed ledger technology, a group of India’s 11 largest banks including ICICI Bank, Kotak Mahindra Bank, HDFC Bank, Yes Bank, Standard Chartered Bank, RBL Bank, South Indian Bank, and Axis Bank have launched the 1st ever blockchain-linked loan system in the country. This not only guarantees transparency in loan disbursement but also eliminates any communication challenge among the different banks.

What is a Blockchain or a distributed ledger technology?

  • Imagine a Microsoft Excel Sheet file in your laptop with notes you’ve made. You can call it a ledger. (Ledger is a book containing accounts to which debits and credits are posted from books of original entry).
  • Now, imagine that your Excel file is copied to hundreds of your friends’ computers, connected to each other forming a network. The ledger in your laptop has now become a distributed ledger.
  • Then imagine that this network of computers is designed with technology to regularly update this Excel file whenever you or your friends update the ledger. Thus you have the distributed ledger technology or commonly known as Blockchain technology.
  • Hence Blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value — money, but also titles, deeds, identities, even votes — can be moved, stored and managed securely and privately.
  • In simple terms, blockchain is a digital, decentralized and public ledger.

Why is it called [Block]Chain? (How does it work?)

  • The blockchain is an incorruptible digital ledger of transactions that can be programmed to record virtually everything of value. Each list of record in a blockchain is called block.
  • Hence a blockchain is an increasing list of records known as blocks, which are linked and secured mass collaboration and clever code.
  • Blockchain works through three key technologies
    • Private Key Cryptography.
    • P2P Network (Peer-2-Peer).
    • Program (the blockchain’s protocol).

Who invented blockchain technology?

  • It was invented by Satoshi Nakamoto of Japan in 2008 for the use in Cryptocurrency bitcoin, as its public transaction ledger.
  • His objective behind using blockchain for bitcoin is that to allow users to control their own money = no third party, even the government would be able to access or monitor it.
  • Satoshi disappeared back in 2011, leaving behind open source software that the users of Bitcoin could update and improve.
  • Thus bitcoin (with Blockchain application) became the first digital currency to address the double spending problem without the need of a trusted central authority or server. Trust is established through mass collaboration and clever code rather than by powerful intermediaries like governments and banks.

What is the need of Blockchain technology?

  • No Errors: Blockchain makes everyone accountable, that is, no more missed transactions, human or machine errors, or a transaction that was not done with the consent of the stakeholders.
  • Security: It ensures the validity of a transaction by recording it on both main register as well as on a securely connected system of registers (blocks).

What is the difference between Internet and Blockchain technology?

  • The Internet enables computers to exchange information, whereas, Blockchain enables computers to record information.
  • Both use a lot of computers (nodes).

What are the applications of Blockchain technology?

Financial services

Blockchain technology can be used in money transfers, record keeping and other back-end functions in the bank. Following are the various areas in the financial sector where blockchain technology can be used:

  • Trade finance
  • Cross-border payments
  • Bond-trading
  • Supply chain financing
  • Custody & Securities Servicing
  • Loan Syndication etc
  • Money – Cryptocurrencies like Bitcoin provides people across the globe with instant, secure, and frictionless money, and blockchains provide the permanent record storage for their transactions


  • The blockchain technology is a potential vehicle to improve government services and foster more transparent government-citizen relations.
  • The distributed tech can work to dramatically optimize business processes through more efficient and secure data sharing.


Blockchain Technology has the potential to disrupt the healthcare industry’s centralized operations, opening the door for optimized business and service delivery. The Distributed Ledger Technology (DLT) is an innovation fertile with the possibility of improved transparency, security, and efficiency. Smart contracts on the blockchain operate automatically without third-party personnel needed to verify documents or specific steps using pen-and-paper processes. With automation comes a reduction in the notorious bureaucracy that currently stands in the way of patients receiving the best care possible.


Student records, faculty records, and educational certificates can be maintained with the application of Blockchain technology. Blockchain can also simplify certificate attestation and verification. It could even transform the manner in which the policy for educational inclusion is framed by bringing in base uniformity in the tracking of national metrics.


Blockchain technology can be used to increase transparency, reduce complexity and cost in food-based value chains by enabling trustworthy provenance and traceability from farmer to consumer. Other possible applications include the use of blockchain technology to record and manage agricultural land records as well as agriculture insurance

Civil records

The civil registration process can be simplified through the application of Blockchain technology to create distributed citizen registration platforms and even register vital events such as births and deaths on a blockchain. This can help make citizen records tamper-proof, resilient, secure and private, thus providing wide-ranging benefits for a variety of stakeholders.


Blockchain technology can be used to efficiently maintain and track information regarding defence infrastructure and computer.


In blockchain voting, a vote would be taken into account via blockchain, online ledger where every vote will be registered. Every vote will be added as a block where each one is verified by every stakeholder based on agreed algorithms. Vote, rather being kept at a single location, an identical copy of the blockchain is stored on every user’s server. The anonymity of voters, Public key encryption and Audit trail are notable features of Blockchain based voting.

Internet of Things (IoT)

Blockchain technology provides the ideal engine to power a fairly new concept regarding our new connected world: Internet-of-Things. Spending on the internet-of-things market is expected to top the $1 Trillion mark in the coming years. This opportunity is poised for Blockchain Internet-of-Things to step in and provide the ultimate system to track the unique histories of the billions of smart-devices coming online over the next few years.


Blockchain Insurance allows for the entire insurance industry to dramatically optimize business processes by sharing data in an efficient, secure, and transparent manner. Using blockchain to revolutionize insurance policies shifts systems onto smart contracts operating autonomously on peer-to-peer networks, helping to phase out antiquated pen and paper processes and eliminate red tape the insurance industry is notoriously riddled with.

Ownership rights

Applying blockchain technology to music applications, for instance, allows for a paradigm shift in the way artists can control their musical work. From ownership rights to royalty payments and first edition rights, blockchain technology applications empower artists to extend ownership of their works.

Real estate

Blockchain technology will inevitably become a foundational pillar of the real estate industry. In a mostly paper-record based industry, blockchain real estate allows for an unparalleled upgrade in how records are stored and recorded. Utilizing blockchain applications in essential functions such as payment, escrow, and title can also reduce fraud, increase financial privacy, speed up transactions, and internationalize markets.

Supply chain

Managing the modern, often global, supply chain is a series of intensive processes that require perfect orchestration between many moving parts and actors. Blockchain can help in creating links to distribute goods and services across the globe without intermediary participation.

Smart Contracts

In blockchain law applications, smart contracts are verified on the blockchain, allowing for programmable, self-executing and self-enforcing contracts. Blockchain technology also encompasses the idea of “Smart Corporations” which includes concepts such as Decentralized Autonomous Corporations (DAC) or Decentralized Autonomous Organization (DAO).

What are the challenges to its adoption?

What are the initiatives in India?

  • Yes Bank has adopted the technology to fully digitize vendor financing for one of its clients which enables timely processing of vendor payments without physical documents
  • In Feb 2018, the SBI announced that it would use blockchain technology in its reconciliation, remittances, and trade finance operations in the fiscal year 2019
    and manual intervention while tracking the status of transactions in real time.
  • NITI Aayog is reportedly building a platform called ‘IndiaChain’ — a shared, India-specific Blockchain infrastructure to leverage the trinity of Jan-Dhan-Yojana, Aadhaar and the mobile.
  • Andhra Pradesh has become the first state in India to adopt blockchain for governance.
    • It has piloted two key projects: managing land records and streamlining vehicle registrations.
    • It has also partnered with private companies to test use cases. For example, it has secured more than 100,000 land records through Indian Blockchain start-up Zebi Data, which is also working with other states including Maharashtra and Telangana.
    • Swedish Blockchain start-up, ChromaWay, has also partnered with Andhra Pradesh to provide land registry solutions
    • Andhra Pradesh through its Fintech Valley Vizag initiative also plans to build the largest repository of Blockchain use cases in other key areas such as transport, finance, and digital security
  • Telangana announced initiatives to leverage blockchain to mitigate the pervasive corruption and fraudulent activity embedded in the government sector.
  • A group of India’s 11 largest banks including ICICI Bank, Kotak Mahindra Bank, HDFC Bank, Yes Bank, Standard Chartered Bank, RBL Bank, South Indian Bank, and Axis Bank have launched the 1st ever blockchain-linked loan system in the country.

What is the way forward?

  • In the current regulatory environment, Indian developers do not have the ability to develop open blockchain solutions at scale.
  • Serious blockchain professionals are migrating rapidly to countries with more friendly regulations. As a result, India’s ability to benefit from jobs, capital, local innovation, and positioning is all curtailed without the talent ecosystem in place.
  • The government has legitimate concerns around money laundering, tax evasion and capital flight using cryptocurrencies. But regulating the space is not too difficult with a light touch and intelligent policies.
  • However, the projects, for example, Aadhar, and e-KYC frameworks which have reached mass on a vast scale, give an optimistic outlook that there are positive conditions for the implementation of Blockchain.

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